June Truck Tonnage Ticks Down 0.8% on Annual Foundation
Vehicles on a freeway. American Trucking Associations’ For-Rent Truck Tonnage Index dipped barely in June in comparison with June 2022 however was up 2.1% from Might. (WendellandCarolyn/Getty Photographs)
[Stay on top of transportation news: Get TTNews in your inbox.]
Truck tonnage in June slipped 0.8% when measured in opposition to the identical month in 2022, the fourth consecutive year-over-year decline, in keeping with American Trucking Associations‘ For-Rent Truck Tonnage Index launched July 18.
Nonetheless, on a month-to-month foundation, the seasonally adjusted index rose 2.1% in contrast with Might, ATA mentioned. The index equaled 116.5 in June in contrast with 114.1 in Might.
ATA Chief Economist Bob Costello mentioned that regardless of the sequential positive factors, the freight market remains to be in a down cycle.
“Whereas the tonnage index elevated in each Might and June, it stays in recession territory,” he mentioned. “The index continues to fall from a 12 months earlier and is off 1.9% from its current peak in September 2022. A large number of things have triggered a recession in freight, together with stagnant shopper spending on items, decrease dwelling building, falling manufacturing unit output, and shippers consolidating freight into fewer shipments in contrast with the frenzy throughout the items shopping for spree on the peak of the pandemic.”
Costello famous, nonetheless, that there are hopeful indicators.
“The magnitude of the year-over-year declines is bettering, maybe pointing to a backside within the freight market,” he mentioned. The sequential decline in June was narrower than the two.4% month-to-month decline in Might. In calculating the index, 100 represents 2015.
Individually, one other intently watched transportation business index reveals the sector is slipping into recession territory. For June, the Logistics Managers Index got here in at 45.6, the fourth consecutive month that the LMI has reached an all-time low.
Arizona State College enterprise professor Dale Rogers, an writer of the index, mentioned the economic system has clearly shifted from one dominated by items to being extra balanced with companies.
“When taken as an entire, quarter two financial knowledge was robust within the U.S. — if not within the freight sector,” he mentioned. “As an example, new dwelling gross sales are up, the unemployment price is down, and quarter one GDP progress has been revised as much as 2% progress with quarter two progress predicted to be round 1.7%. A lot of this has been spurred by shopper spending, which was up at 4.2% in quarter one — the best optimistic price of change for the reason that finish of lockdowns in mid-2021,” Rogers mentioned.
He added that shopper sentiment stays resilient.
“Spending remains to be sturdy — notably when in comparison with the remainder of the world,” Rogers mentioned. “That is considerably buoyed by shopper sentiment, which improved considerably in June, studying in at 64.4 in keeping with the College of Michigan’s Client Sentiment Index. This studying is up 8.8% from Might and 28.8% year-over-year, suggesting that buyers usually are not almost as apprehensive a few recession as they have been a 12 months in the past when inflation was driving up costs.”
The makers of Transport Subjects’ up to date Prime 100 For-Rent Carriers checklist look at trucking’s shifting enterprise surroundings and what it means for the provision chain. Tune in above or by going to RoadSigns.ttnews.com.
Researchers at Arizona State, Colorado State College, Florida Atlantic College, Rutgers College and the College of Nevada-Reno compile the report every month at the side of the Council of Provide Chain Administration Professionals. A studying above 50 signifies financial progress, whereas a studying beneath 50 signifies that the economic system is retracting. The LMI is a mixture of eight distinctive parts that comprise the logistics business, together with stock ranges and prices, warehousing capability, utilization, and costs, and transportation capability, utilization, and costs.
In the meantime, the month-to-month DAT Truckload Quantity Index reveals the trucking business stabilized in Might and June, albeit at a slower price than throughout the extremely charged three years of the COVID-19 pandemic. The index is an indicator of what number of masses are moved throughout a given month.
For June, the dry van index was down 1% in contrast with Might, and the refrigerated freight TVI declined by 3%. Nonetheless, the flatbed TVI posted a 2% acquire.
On the spot market, the nationwide benchmark charges for van and reefer freight rose, whereas the flatbed price declined in contrast with Might.
The spot van price was $2.08 per mile, up 3 cents for the primary improve in 5 months, whereas the spot reefer price was $2.47 a mile, up 3 cents. The spot flatbed price was $2.61 a mile, down 4 cents.
“The hole between spot and contract charges was the narrowest since April 2022,” DAT Chief of Analytics Ken Adamo mentioned. “Charges for van and refrigerated freight elevated for the third straight month, and volumes have been virtually unchanged from Might. These are indicators that spot truckload costs have reached the underside of the present freight cycle.”
Adamo added that DAT and others throughout trucking are following the continuing UPS-Teamsters negotiations, which might tighten capability if staff strike.
“Demand for truckload companies usually slows presently of 12 months, however this might change rapidly given the specter of strikes within the parcel and less-than-truckload sectors,” Adamo mentioned. “Shippers are placing contingency plans in place and would look to freight brokers and carriers on the spot market to maintain their linehaul operations shifting. Demand for vans would leap, particularly round Louisville, Memphis, Indianapolis, Dallas and different main parcel hubs.”
Need extra information? Hearken to at this time’s day by day briefing beneath or go right here for more information:
